communist and post-communist countries. karl marx “father of communism” german socialist the...

COMMUNIST AND POST-

COMMUNIST COUNTRIES

Karl Marx

• “Father of Communism”• German Socialist• The Communist

Manifesto (1848)

Principles of Socialism

• Private enterprise=unacceptable inequality• Capitalist elite exploit masses• People as a whole should control economic

enterprises.• Equality of outcome (no hunger or poverty)

Principles of Marxism

• Society passes through stages– Pre-modern to industrial

• Class conflict– Bourgeoisie (Capitalist elite)– Proletariat (working masses)

• Elite create a SUPERSTRUCTURE– Institutions to control the masses• GOVERNMENT• RELIGION

Principles of Marxism

• Revolution occurs in an industrialized society– Proletariat masses rise up

• Post-Revolution– No superstructure– No exploitation of worker– No private ownership– “From each according to his abilities,

to each according to his needs.”• Society w/no

superstructure=“Communism”

Russian Revolution, 1917

• BOLSHEVIKS overthrew Russian government.– “Larger Faction” of Social Democratic Party– Actually: the minority– Eventually call themselves “COMMUNISTS”

• V.I. Lenin: Marxist leader of Bolsheviks

• Solidified control in 1921.

• Renamed Union of Soviet Socialist Republics

Leninism v. Marxism

• Russia was pre-industrial• A VANGUARD of the

REVOLUTION (small group of revolutionary leaders) was necessary to provoke revolution.

• DEMOCRATIC CENTRALISM– Rule by a few key

leaders.

• Primacy of the Communist Party of the Soviet Union (CPSU)

• New Economic Policy (NEP)– Allowed some private

property and businesses

Marxism-Leninism

• Marx’s revolutionary anti-capitalism; Lenin’s reliance of communist party-state.

• 1924: Lenin dies • Named no successor• 1927: Joseph Stalin

took control.

Stalin’s Two-Part Plan

COLLECTIVIZATION• Ended private

ownership (NEP)• Collective Farms

– Huge, state-run farms

INDUSTRIALIZATION• Forced society to

industrialize.• Surplus peasants farmers

forced to cities.• Five Year Plan

– Double production of all major industries.

• Gosplan– Central State Planning

Commission created goals for entire economy.

Stalinism

• Collectivization and industrialization by central planning, executed with force and brutality.

PURGES• Millions of citizens and

party member killed.• Obsessed with

disloyalty within party.• Millions more sent to

labor camps (gulag)

Command v. Market EconomyCOMMAND ECONOMY MARKET ECONOMY

Resource use and production

Ownership of Industry

Property RightsEmployment

Determined by Central Planning

Determined by supply

and demand.State owns

most economic resources

Private ownership of

resources.

Little to none Fully Protected

State-controlled

Individual-controlled

The Party State

• CPSU ran the state.• Oversaw all people and

institutions.• CPSU only route to

success.• 10% of adults were

members• Power centered with

POLITBURO & SECRETARIAT– Democratic Centralism– GENERAL SECRETARY

was head of both

Recruitment of Party Elites

• Nomenklatura– Lists of “qualified” CPSU members who could fill

important party positions.– Secretariat controlled appointments– Elite ruling class

Communism and the Cold War

• Nikita Khrushchev (1953-64)– Loosened censorship– Denounced Purges– Decreased Cold War

tensions

• Leonid Brezhnev (1964-1982)– Stagnating economy– Massive military

spending

Mikhail Gorbachev (1985-1991)New Programs

• GLASNOST: – political “openness”– Political dissent

• PERESTROIKA:– Economic

“restructuring”– Introduce elements of

market economy– Private enterprise and

private ownership (farms)

Flaws in the Soviet System

Lack of incentive for workers• “They pretend to pay us; we pretend to work.”• “The system is not working because we are

not working.”

Flaws of Soviet System

Lack of innovation• Nomenklatura– Inbred spoils system– Encourages status quo

• RAMPANT BUREAUCRATIC INEFFICIENCY– Poorly planned/run economy

Flaws of the Soviet System

Excessive Defense Spending• 40% of the Budget• 15-20% of GDP

• 4 times greater than U.S.

Glasnost: Soviet Republics USSR• 15 republics• 92 different ethnic groups• 112 different languages• Various republics (regions) pushed for independence.

• Baltic States: 1989– Latvia, Lithuania, Estonia

1991 Coup Attempt

• Communist hard-liners oppose Gorbachev’s reforms.

• 3-day coup• Gorbachev

detained at dacha.

1991 Coup Attempt

• Boris Yeltsin– President of Russian Republic– USSR’s largest “state.”

• Rallied public• Opposed Coup• Gorbachev resigns• USSR disbands– Dec 1991

Commonwealth of Independent States (1991-current)

Yeltsin and “Shock Therapy”

• Rapid shift to a market economy• Government privatizes “commanding heights”

Yeltsin and capitalist “oligarchs” vs.

red directors

• Power in hands of an elite few– Corruption

Impact of Shock Therapy

• Massive Inflation– 1986: 20 rubles=$1– 1997: 5,500 rubles=$1 2011: 30 rubles=$1

• GDP: 1989=500 billion 1999=195 billion• Unemployment: no govt. secured jobs.– 1998: 12%

• 16% of population lived on $1-$2 a day.• Huge gap between rich and poor• Public faith in a market economy dwindled.• 1997: Government defaulted on debt.

Vladimir Putin

• Former KGB spy• Prime Minister under

Yeltsin (1999)• Acting president after

Yeltsin resigned• Won presidential

election (2000 & 2004)

Putin & Economy

• Stabilized economy after Yeltsin’s 1990s.

GDP• 1999=195 billion• 2009= 1.2 trillion• Increase of foreign

direct investment (FDI) in Russia

• Major exporter of oil.• Modernization